Yahoo CEO Carol Bartz speaks at the Web 2.0 Summit in San Francisco, Tuesday, Nov. 16, 2010. Yahoo Inc. is hopping on the bargain-hunting bandwagon with Groupon, the Internet's hottest discount broker, and more than a dozen other similar services. (AP Photo/Paul Sakuma)

Normally a sunny celebration about the future of the Web, one of the largest annual gatherings of the Internet elite took on a darker and more pessimistic tone this week.

The fear that ran through the seventh annual Web 2.0 Summit is that the days when the Internet was a playground for startups with unlimited potential are disappearing. Instead, we are moving into an era dominated by a handful of new Internet titans more interested in fighting each other for power and influence than in delighting users with new innovations.

The names of the culprits are familiar, and include Apple, Google, Facebook and Amazon.com. Each has assumed a dominant position in their respective markets — mobile, search, social networking, e-commerce — and are focused on how to defend their turf while infiltrating their rivals’ territory.

We, the consumers, are caught in the crossfire. We’re likely to see fewer new products (like Twitter) and more services aimed mainly at locking us into the new Internet titans (I’d count Facebook’s new message service in this category).

By building up their walls, they keep us inside longer, allowing them to amass an arsenal of data about our behavior. And they have become so indispensable it becomes almost impossible for us to contemplate leaving them.

“We’re seeing something very, very different than we saw seven years ago when it was all explosive new greenfield territory,” said conference co-host Tim O’Reilly. “We are seeing companies that are big — some of these companies are swelling in size. We’re entering a period of conflict on the Web, of intense competition.”

In a calendar overstuffed with Internet and startup conferences, the Web 2.0 Summit still stands as one of the must-attend events for industry leaders. This year, the CEOs of Adobe Systems, Yahoo, Facebook, Research In Motion, Google and Zynga all took the stage. It’s worth paying attention to what happens here.

This year’s message is not an easy one to deliver in Silicon Valley. We cling tightly to the view that the Web is a wide-open marketplace where any savvy entrepreneur is just one bright idea away from creating the next Google.

What if that’s wrong? What if giants like Google are so firmly entrenched there’s no hope of dislodging them, no matter how much better someone builds a mousetrap?

On Tuesday, Morgan Stanley Internet analyst Mary Meeker illustrated the emergence of these new Web giants with a slide listing the top 15 public Web companies in 2004 and 2010. In those six years, the market value of the group grew from $304 billion to $809 billion (and that’s certainly not because the stock market tripled), while their annual revenues climbed from $33 billion to $126 billion. The big have gotten much bigger.

Not everyone agrees this is a problem. Google CEO Eric Schmidt, while being interviewed on stage, waved off the notion.

“People are obsessed about the competitive landscape when what they should really be focused on is how much bigger the market is getting,” he said.

But Adobe CEO Shantanu Narayen was brutally honest when pressed about the heated rivalry that emerged earlier this year between his company and Apple.

“It is all about how you control what’s happening in this new economy,” he said, in describing why Steve Jobs trashed Flash, Adobe’s software that powers video on the Web.

If there’s a silver lining, this shift might give us a chance to catch our breath after years of breakneck change.

“I think it’s a moment of stability,” said Charlene Li, founder of the Altimeter Group, a technology research and consulting firm. “It’s a time to step back, take a break, and absorb it all.”

Still, the struggle of the big players changes the opportunity for startups. It will be harder for a big idea like Twitter or Zynga to break through and join the elite. Instead, more startups will focus on smaller ideas like apps, or designing new features in hope they will be bought by one of the big players.

O’Reilly issued a plea to the people here to avoid this looming era of conflict.

“I also want to remind everyone in the audience, and everyone who is making these strategic decisions, how much value we’ve gotten by cooperating this far,” he said. “And I hope that we don’t get into destructive competition.”

That pitch got a rousing cheer from the audience. But I doubt that applause was loud enough to reach the executive cubicles where the battle plans for the war of the Web are being drawn up.